Open banking law to boost fintech competition
Australia’s prime minister, Scott Morrison, and various senior figures in the fintech industry have hailed the passage of the consumer data right law through parliament, contending that the new Open Banking regime will shake up competition for consumers and boost start-ups against the big banks.
The new law aims to boost fintech competition.
The consumer data right law passed by the Senate on 01 August was a critical component of the emerging Open Banking system and will ultimately be extended to the telecommunications and energy sectors.
Championed by Morrison when he was treasurer as a signature microeconomic reform, the new rules require banks to make customer data available to competitors on credit and debit cards, deposit and transaction accounts and mortgages if a consumer wants to switch banks, for example to a smaller lender or a fintech operator.
Stuart Stoyan, chief executive of peer-to-peer lender, MoneyPlace and the former chairman of Fintech Australia, said the law would make it easier for consumers and small businesses to share their data so they can change banks, get a cheaper loan or use a budgeting tool.
“The Consumer Data Right empowers consumers so that they can take control of their data and get a better deal,” says Stoyan. “As we expand CDR to the energy and telco sectors, we will see the elimination of products and services that are complicated, convoluted and rip customers off.”
